Movenbank Might be Forced to Offer Physical Cards

US start-up Movenbank, which has positioned itself as a mobile-only, cardless, branchless bank, may be forced to offer companion, plastic cards to customers in order to be compliant with US regulations.

Movenbank is working with MasterCard on a planned February 2013 launch which will see customers issued with contactless stickers that they can attach to their mobile phones, says founder and CEO Brett King.

However, the start-up is now in discussions with MasterCard about whether their mobile-only business model is in conflict with the Durbin Amendment to the Dodd-Frank Act of 2010 relating to cards and interchange fees.

Although nothing is yet settled, King concedes that Movenbank may be forced to offer a card option to customers in order to be compliant with the regulation but maintains that the firm is still very much "anti-card" and will print 'Emergency use only - Do not use' on them, if they are required.With the explosion of new and different banking models being introduced to consumer, the definition of a bank is sometimes in question, and in a state of flux. In this example, questions emerge about whether, and to what extent, a mobile-only business model works within a banking framework.

Questions also arise about overall customer expectations, and whether they would prefer the use of cards on occasion, and to what extent. These questions, and others as well, will be integral parts of future discussions about banking models and overall banking strategies.